South Africa retail sales surprisingly strong
By Cees Bruggemans, Chief Economist of FNB.
Retail sales volumes in April surprised with a 10% jump over a year ago, double the 5% growth expected.
It helped that the April 2010 base was less holiday intensive than April 2011, meaning there were about the same number of holidays in April this year but so arranged that a lot more people seem to have made use of the opportunity to take extended leave.
As such quite a holiday spirit came to prevail this Easter, indeed apparently exceptionally so when extended to retail conditions.
A holiday spirit was reflected in very strong showings in food/drink (+6.6% compared to declines previous three months) and clothing/footwear (+17% compared to 5.5% average previous four months).
There was a strong showing by furniture (+13%), indicative that households have not stopped replacing and adding to their stock of durables (with store credit rumoured to be plentiful).
There were also good showings by pharmaceuticals (+13%) and hardware/glass merchants (+9%). General dealers continued strong at +7%.
Retail sales volumes, seasonally-adjusted, are now some 4% above their April 2008 cyclical peak, and are moving steadily, even robustly higher, suggesting strong underlying income growth and good store credit support.
Source: Cees Bruggemans, FNB, June 15, 2011.